Enbridge limits Edmonton heavy oil deliveries on high stocks: letter

CALGARY/NEW YORK (Reuters) - Enbridge Inc (ENB.TO) will be limiting deliveries from heavy feeder crude pipelines in Edmonton, Alberta, by 25 percent from Aug. 1-9 due to high inventory levels, according to a July 28 customer letter seen by Reuters.

The move comes as the majority of Canadian oil sands producers have returned to normal operations following wildfires in May, causing a build-up of crude in the area. Some traders say the receipt restrictions could lead to pipeline apportionments in coming weeks.

Enbridge will continue to review its stockpiles and adjust receivable limits, the letter added.

Enbridge’s Edmonton Terminal is one of the company’s two delivery points for its Athabasca Regional Oil Sands gathering system, and moves an average of 1.25 million barrels of oil a day, according to the company’s website.

The 8.5 million-barrel terminal has 40 tanks and is also the starting point for Enbridge’s Mainline crude oil pipeline system, which ships the bulk of Canadian crude exports to the United States.

A spokesman for Enbridge, Canada’s largest pipeline company, declined to comment.

Data from energy intelligence firm Genscape showed utilization rates at the Enbridge terminal in Edmonton were just below 60 percent, after stocks built by 2 million barrels in the week ended July 22.

“Crude stocks at Edmonton have been on the rise since mid-June, following production returns in the region,” Genscape oil analyst Dylan White said in an email. “Enbridge likely leaves vacant capacity for operational purposes, and it is unknown how much capacity, if any, has already been leased.”

The record utilization rate for Enbridge’s Edmonton facility was 75 percent in the week ended Aug. 21, 2015, White said, adding that those past inventory levels would suggest Edmonton has room to store more barrels.

Last week Enbridge announced it would be apportioning crude volumes on its heavy system in August by 15 percent.

On the company’s second-quarter earnings call on Friday, Guy Jarvis, executive vice president of liquids pipelines and major projects, said that meant more than 200,000 barrels per day of heavy oil volumes that shippers wanted to move on the Enbridge system could not be accommodated.